What is a sales funnel and how does it help a business

What is a sales funnel and what does it consist of

A sales funnel is the path a customer takes from their first interaction with a brand to the purchase of a product or service. In the classic version, it consists of four stages:

1. Attention. This is the first point of contact between the buyer and the brand. He may see an advertisement on the Internet or on a billboard, receive a call, or in some other way learn about the company's offers.
2. Interest. The person shows attention to the proposal. For example, he clicks on a link, calls or writes - somehow begins to study it.
3. Wish. The client is interested in the offer, he feels the need to purchase a product or service.
4. Action. The person makes a deal.

The name "funnel" is not accidental here. It is assumed that if you graphically depict the number of people who ended up at each next stage, you will get an inverted pyramid. Let's say

advertising 1,000 people saw it, 500 followed the link, 100 got interested in a product or service, and 10 paid for it. The numbers may be different, but the trend itself is quite expected: the further, the less.

Depending on how efficiently the process is built at all stages, the funnel can end in a dead end or expand at the bottom and practically turn into a sales pipe.

Why work with a sales funnel

It may seem that knowledge of the sales funnel is optional. Business in any case will lead customers along this path, it is intuitive. But understanding the mechanism allows:

• understand at what stage the failure occurs and correct errors;
• test new hypotheses;
• make marketing campaigns more effective.

Therefore, it is important to calculate the conversion of each stage. This is done using the following formula:

Current stage indicator / previous stage indicator * 100.

Let's say an ad was seen by 10,000 people and 100 clicked on it. The conversion will be 1%. Is it a lot or a little? It depends on many factors, so each brand will have to decide on its own.

To better understand how this works, let's look at examples. Let's say there are two businesses. One ordered a marketing campaign for 10 thousand rubles, the second - for a hundred thousand. The first ad was viewed by 10,000 people, 2,000 went to the site, 700 customers made a purchase. The announcement of the second was seen by 5,000 people, but only 20 came to the store, and five bought the goods. It seems that the second is clearly the loser. He and advertising cost more, and purchases are much less. If we evaluate all stages, then its conversion is only 0.1%, while the first one has 7%. But the situation will look different if it turns out that one company sells printed T-shirts for a thousand rubles, and the second sells expensive ones. cars. Because the revenue of 700 thousand is much less than the multi-million dollar profits.

Rather, it is about finding weaknesses in your own processes and improving performance compared to yourself. Imagine: potential customers responded well to advertising, and many went to the site. But few people made purchases. This means that something is wrong at the stage when a person should have a desire to pay for the goods. The analysis will help to understand what exactly.

How to work with a sales funnel

Much will depend on the specific business. But there are some universal tips that can be applied at different stages.

Attention → Interest

It happens that there seems to be advertising, but there is no particular interest among customers. This is a reason to rethink the campaign.

A person will not be attracted by advertising if it does not hit him. Therefore, it is necessary to study the target audience and its needs. This will allow you to target ads more accurately. It often makes sense to segment potential customers in order to be more efficient.

Suppose a company sells sticks for nordic walking. This sport is available to people of all ages and fitness levels. You can sell it to the elderly and, accordingly, equipment for it, with an emphasis on natural movement, low stress on the joints and safety. But it will be more difficult to attract younger and healthier people with the same offer. But the story about the possibility of burning more calories compared to other cardio exercises.

The better you know who you want to sell your product or service to, the easier it will be to get them interested through a good unique selling proposition (USP).

This is what motivates the client to contact you, distinguishes you from competitors, describes the benefit of the buyer. A high-quality USP tells him: I will satisfy your need, close your pain. If an ad doesn't work, even though it's targeted to the right audience, it may not have those promises or they're not clearly worded.

For example, the phrase "These headphones last a week without recharging" is likely to be more effective than "The right headphones for the right music." The second thesis does not give any specifics, but only makes the copywriter suspect of snobbery. But the first closes the understandable pain for many: there is no strength to constantly charge gadgets.

Interest → Desire

At this stage, there are even more options for steps, since each business has many nuances. But perhaps the most important thing here is to provide the buyer with a simple interaction with you and make sure that his expectation and reality coincide.

For example, a person clicked on an ad and went to a website. If he does not find there what the banner or video promised him, he will leave. Here the situation is with sales: the buyer is attracted by the ad “everything from 99 rubles”. And in the store, he finds that only a handkerchief costs so much, the rest is much more expensive, and he feels deceived. Therefore, it is important that the advertising message is truthful.

As for the ease of interaction, you will have to study this process to find errors. Maybe the site is not intuitive and a person simply cannot find anything. Or managers do not work out requests for a callback. Or something else is happening that is only noticeable from the inside. In any case, this is an important stage, since the client came already warmed up, so it makes sense to pay a lot of attention to failures.

Desire → Purchase

It would seem that if a client wants to purchase a product or service, then what can stop him? Actually a lot. For example, a person has objections, but the manager does not know how to deal with them. Or again, an inconvenient site is working against you. Or the conditions for returning the goods are not prescribed, and the buyer is afraid. After all, he could put the goods in the basket and get distracted, and you have no function to remind him that he is one step away from the deal.

Therefore, it is important to make sure that the path from desire to purchase is simple and clear.